MP’s concern at rise in number of employees being paid below the minimum wage

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17 Jan 2020
Margaret Greenwood, MP for Wirral West, has spoken of her concern after a report by the Resolution Foundation highlighted an increase in the number of workers aged 25 and over being paid less than the minimum wage. The Resolution Foundation is an independent think-tank focused on improving the living standards for those on low to middle incomes.

According to the research, in 2016 just over 22% of workers aged 25 and over were paid under the minimum wage, but the figure now stands at 26%. 

The report also found that thousands of employers who pay workers less than the minimum wage are getting away with breaking the law, with only one in eight caught by HMRC inspectors.

While there are both civil and criminal penalties for firms caught underpaying the minimum wage, in practice they are often not fully imposed. Only 14 employers have been criminally prosecuted for minimum wage underpayment in the last 20 years, incurring an average fine of less than £3,000 each.

In April this year, the minimum wage is set to rise from £8.21 to £8.72 per hour for those 25 and over, while it is set to rise from £7.70 to £8.20 for those aged 21-24, £6.16 to £6.45 for 18-20 year olds, £4.35 to £4.55 for under 18s and £3.90 to £4.15 for apprentices.

The Resolution Foundation has argued that, given the planned rise, the government should review the potency of the current deterrence system and take steps to strengthen the regime.

Margaret Greenwood, who is also Shadow Secretary of State for Work and Pensions, said:

“I welcome this important report by the Resolution Foundation.

“It is a matter of real concern that under-payment of the minimum wage is on the rise.

“Employers who fail to pay the minimum wage are actually breaking the law. They are also exploiting their staff.

“The report highlights the fact that the chance of employers who fail to pay the minimum wage being detected is very low and that the current level of fines and rate of detection are not sufficient to deter underpayment.

“The government should pay careful attention to the findings in this report and take action to improve detection rates and enforce the law. No one should be paid less than the minimum wage.

Anyone who believes that they are not being paid what they are entitled to should raise it with their employer in the first instance, or call the confidential Acas helpline on 0300 123 1100 for further advice and assistance.

People can also visit the gov.uk website via the following link for further ways to report not being paid the minimum wage: https://tinyurl.com/gkt45sh

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